2019 (1) TMI 1438 - AT - Service Tax

Commercial training and coaching service - business of teaching - Held that - The service proffered by commercial training and coaching centres were subject to tax with effect from 1st July 2003 but, at the same time, exempting vocational/computer/recreational training institutes from the purview of tax - The scope of taxability of the service was examined by the Larger Bench of the Tribunal in Great Lakes Institute of Management Ltd v. Commissioner of Service Tax, Chennai 2013 (10) TMI 433 - CESTAT NEW DELHI - LB wherein it was held that, with the insertion of Explanation in 2010 with retrospective effect, section 65 (105) (zzc) of Finance Act, 1944 has undergone a sea change in its impact and admitting of no exceptions save that explicitly excluded by Parliament or deliberately exempted under the relevant powers devolving on the executive. Consequently, in relation to the present dispute, it is the extent of applicability of exemption notifications that would allow for a proper resolution. From inception, recreational training centres have been illustrated by reference to dance, singing, martial arts and hobbies. Not only is this claim for alternative benefit accorded to mutually exclusive categories repugnant to propriety expected of a training centre handling students but appears to have all the hallmarks of a shot in the dark without much effort at diligent aim. It is seen from the records that detailed submissions for such coverage was not made before the lower authority. The scope for inclusion among recreational training centre is question of fact and determined on establishing that study of English is a hobby as claimed in the present appeal. The submissions made on the plea for exclusion from the extended period of limitation and consequent penalty also requires careful consideration. Matter remanded back to the original authority to take a fresh decision to consider the pleas made to invoke the limitation provision in section 73 of Finance Act, 1994 - appeal allowed by way of remand.

Issues Involved:
1. Tax liability for commercial training and coaching services provided by a company.
2. Applicability of tax regime and exemptions for the period in question.
3. Interpretation of definitions in the Finance Act, 1994 regarding training, coaching, and teaching.
4. Claim of exemption under notification no. 24/2004-ST for vocational training or recreational training.
5. Bar on demand due to limitation and imposition of penalties.
6. Comparison of relevant case laws to support arguments.
7. Consideration of the scope of taxability for training institutes.
8. Evaluation of the claim for exclusion based on the extended period of limitation.

Detailed Analysis:

1. The judgment deals with the tax liability imposed on a company providing commercial training and coaching services. Three notices were issued demanding tax for specific periods, which were adjudicated by the Commissioner confirming the liability. The appeals challenged the demands, interest, and penalties imposed, leading to the disposal of all three appeals through a common order.

2. The judgment discusses the tax regime applicable to the service provided, transitioning from specific taxable services to the negative list regime. It highlights the peculiarities of taxing education services and the evolution of tax coverage under this category. The judges commit to examining these aspects in their decision.

3. The interpretation of definitions in the Finance Act, 1994 regarding training, coaching, and teaching is crucial. The appellant argues that they are in the business of teaching, not training or coaching, and presents grounds challenging the demand confirmation. The exemption under notification no. 24/2004-ST for vocational training or recreational training is also a point of contention.

4. The appellant relies on specific case laws to support their arguments, such as the decisions in British School of Language and Actors Prepares.

5. The judgment evaluates the plea for exclusion based on the extended period of limitation and the imposition of penalties, considering whether the demand is barred by limitation and if penalties were rightfully imposed.

6. The scope of taxability for training institutes is thoroughly examined, referring to the decision in Great Lakes Institute of Management Ltd to understand the impact of exemption notifications on the resolution of the dispute.

7. The judgment scrutinizes the appellant's claim of being a vocational training institute and the shift in description to support their position. The judges analyze the applicability of exemption notifications and previous decisions to determine the validity of the claim.

8. Lastly, the judgment discusses the claim for exclusion based on the extended period of limitation and the necessity to carefully consider the submissions made in this regard. The decision ultimately sets aside the impugned orders and remands the matter for a fresh decision by the original authority, emphasizing the consideration of limitation provisions.

This comprehensive analysis covers the various issues involved in the legal judgment, providing a detailed overview of the arguments, interpretations, and decisions made by the tribunal.

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